Friday, September 16, 2005

As predicted, Katrina relief debit cards are being put to good use: food, handbags?


At 9/19/2005 7:50 AM, Blogger Eddie said...

Surprise, surprise. I sent this link to a liberal bleeding heart friend of mine, and his response was, "if they don't need it for necessities, they can spend it as they wish." Yes, he truly believes these people who are wasting it DON'T need it for necessities. Yes, druggies have always been known for providing family necessities first, and wasting the money second, please.

At 9/19/2005 8:33 AM, Blogger Ace said...

So it's ok that even a single dime of my charitable donations or my tax dollars go to strippers? Give me a break!

I grew up in one of the poorest regions of Canada. About a third of my town is either wholly or partially dependent on government run handouts of one form or another. Every 2nd Thursday when the welfare checks arrive, the government run liquor store (which is conveniently located a block from the town's main government run housing project) is packed to capacity.

I had no idea booze was a necessity.

At 9/19/2005 3:36 PM, Blogger Eddie said...

Where did you grow up in Canada? Was it New Foundland, Prince Edward Island? It certainly wasn't Nanavut (showing off my knowledge).

I have only been to Ontario, mostly Toronto. I hope you know that when I make comments about Canada, that I am not referring to normal Canadians, only the liberal, communist socialist one's I have encountered and met.

At 9/19/2005 8:25 PM, Blogger Ace said...

I grew up in Northern New Brunswick. Having been raised in a poor area of the country, I've seen firsthand the corrosive effects of government programs that promote dependency.

Unfortunately, as time passes the terms "Socialist" and "Canadian" are becoming increasingly intertwined. Former PM Trudeau set that process in motion over 35 years ago by systematically enacting all sorts of radical leftist, anti-capitalist welfare programs, and defining them as uniquely "Canadian" institutions.

At 9/23/2005 7:47 AM, Anonymous Jen said...

For shame, Ace! I grew up (and still live) in the same town as you did. Do I consider myself dependent on government handouts? No! Do I enjoy our 'free' healthcare system? Yes! I agree that the system is set up to promote dependence (I saw this first hand as a case worker for the Welfare office), yet there are enough of us non-users/abusers around to warrant that you can still be a liberal and sensible about fiscal responsibility.

Do I find it shameful that charitable donations are spent on frivolous items? Absolutely! Then again, is any system free of abuse? There will always be those who abuse the generosity of others. Perhaps this relief effort is short-sighted? Maybe more emphasis and resources could have been put into evacuation action. But what do I know? I'm just a socialist Canadian after all, eh!

At 9/23/2005 9:06 AM, Blogger Ace said...

I'm confused. Was that "for shame!" directly at the welfare junkie wasting your tax dollars on booze, or at me? Because if it was intended for me, I'm afraid you might have just shot the messenger.

So, you agree that the welfare programs promote dependency, but contend that's ok as long as the welfare dependents are outnumbered by fiscally responsible liberals?

I think therein lies the problem with the liberal approach: handing free money to the poor may make the "fiscally responsible liberals" feel all warm and fuzzy inside, but in reality it does more harm than good.

Dr. Thomas Sowell explores this topic in great detail in his book Applied Economics: Thinking Beyond Stage One. He examined a number of government "solutions" to societal problems (welfare, "free" healthcare, rent control, minimum wage, "no fault" car insurance) that in effect short-circuit the normal functions of the economy. The effects of the "solution" to the immediate "problem" often create conditions that are far worse and impact far more people than the original "problem" ever did.

At 9/23/2005 10:40 AM, Anonymous Jen said...

And would the abolition of all social/welfare problems magically make all societal ills disappear? So long as the human race will exist, we will have to contend with the good and bad of human nature.

At 9/23/2005 11:57 AM, Blogger Ace said...

No need to resort to knee-jerk liberal debating tactics; nobody's suggesting the abolition of programs to benefit the truly needy.

To build on Dr. Sowell's argument, advocates of social programs must think beyond the immediate political considerations in order determine what will be most effective in both the short and the long term. There are many programs that were designed to "solve" a societal "problem" in the short term, without the requisite consideration for the economic incentives and disincentives that could lead to bigger and more expensive problems later. This "Stage One" thinking is understandable given the immediacy of political decision-making (i.e. "Voters complain that rent is high, so I will propose rent control measures to be re-elected."), but it is the wrong approach economically because of the unintended long-term consequences. Hence, Dr. Sowell's subtitle, "Thinking Beyond Stage One".

At 9/23/2005 12:06 PM, Blogger Eddie said...

To say that government programs prevent poverty, at all, is just to blind one's self to reality. Do we have more or less poverty than before we had these so called government "cures?" I would argue we have far more. Are people now more or less charitable now that taxpayers have more money stolen from them to pay for these programs? I would argue less charitable.

What "Jen" fails to speak of in her argument is it is the nature of human beings to take advantage of the system. The more welfare you get, which includes expensive free health care, the less likely you are to work, save and invest. Also, the less likely you are to properly take care of your family including elderly parents and children. Why bother? The government takes care of all that for you. Why bother working or being resourceful when you have the taxpayers to fall back on?

At 9/23/2005 1:11 PM, Blogger Ace said...

Slightly on or off topic, depending on your perspective, but I’m reminded of a study of Canadian retirement programs by Malcolm Hamilton, a prominent Toronto actuary with whom my old roommate used to work. Mr. Hamilton’s analysis investigated the relative retirement incomes of two hypothetical retirees, one a regular working stiff who worked for 40 years and squirreled away $500,000 in tax deferred RRSP investments (sort of like an IRA account in the US), the other a penniless career criminal who was either incarcerated or living on the streets for his adult life (i.e. made insignificant contributions to the tax base or to a government or private retirement program). Hamilton found that the Dutiful Saver and the Career Criminal would both retire with roughly the same annual income due to the Old Age Security and guaranteed income supplements from the Canadian government. In a cruel twist, Dutiful Saver wouldn’t reap any extra reward from his thrift because his government checks would be scaled back by the amount he withdraws annually from his savings. In effect, the safety net for the elderly created a perverse disincentive to private savings.

I would say this qualifies as an unintended negative consequence of a government program with good intentions.

At 9/23/2005 1:47 PM, Blogger Eddie said...

The RSPP plan sucks, to boot. You are restricted to have a certain percent of your assets that HAVE to be in Canadian based companies and funds. I am all for patriotism, but telling me where best in the world to invest my money is a little ridiculous. There are other disadvantages to the RSPP, but I can't recall them as I am not Canadian.

At 9/23/2005 1:58 PM, Blogger Ace said...

Oh, that RRSP foreign content restriction was a huge thorn in my side. The fund managers came up with an interesting way to get around the rule so that investors could boost US exposure in the portfolios without breaking the rules. They constructed US market tracking funds comprised entirely of index futures. Apparently, since the futures themselves are not considered US assets, a neat loophole was discovered. Needless to say, these derivatives based funds became quite popular

On a positive note, I believe the latest federal budget put an end to the foreign content rule once and for all.


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